Continuing High Demand for Banking Ombudsman
8 NOVEMBER 2012
Continuing High Demand for Banking Ombudsman After 20 Years in Business
The Banking Ombudsman Scheme is as important as ever in the banking landscape, despite the industry becoming increasingly attuned to meeting the needs of modern customers, says Banking Ombudsman Deborah Battell.
The Banking Ombudsman Scheme today released its annual report for the 2011/12 year, marking 20 years of dispute resolution in the financial services sector. The scheme was New Zealand’s first voluntary industry-based Ombudsman, established by the New Zealand Bankers’ Association to provide an independent and impartial alternative dispute resolution mechanism for the banking industry and its customers.
Over the last 20 years, the scheme has helped over 62,000 customers, resolved around 20,000 cases and facilitated $36.9 million in compensation. In 2011/12, case-loads remained at historically high levels, with disputes – where banks and their customers have reached an impasse, or where they are simply looking for an independent view – increasing by 20%.
Ms Battell says the banking industry has changed dramatically since 1992, and continues to evolve as new technologies emerge. The types of complaints received have reflected industry developments such as new banking products and services, as well as economic conditions.
“For example, cheque-related cases made up 21% of our caseload in 1992/93, but only 3% this year. Credit card cases also peaked around 2001, but have since fallen back, reflecting banks’ ability to resolve these cases themselves and greater customer familiarity with the way that credit cards work,” says Ms Battell.
“More recently, since the global financial crisis, many of the cases we have investigated have involved complex investment products as well as the lending-related issues that accompany financial hardship. It’s clear that some customers did not understand the risks and benefits associated with fixed term lending.”
Problems of miscommunication are a theme in complaints to the Banking Ombudsman. “Many complaints continue to reflect mismatched expectations” notes Ms Battell. “Banks can help avoid complaints by setting more realistic expectations of their service, and by providing customers with better and more readily understandable information. Customers can avoid problems by asking questions, reading their contracts and ensuring they fully understand what they are signing up for.”
What has remained constant for two decades is the need for an independent arbitrator to help lift industry standards. “Customers tell us they want an independent view and that is exactly what we can give,” says Ms Battell.
The Banking Ombudsman looks forward to continuing to provide high quality dispute resolution services for the benefit of customers and financial institutions, and to highlighting emerging financial issues for the public.
The Annual Report is available online at www.bankomb.org.nz/About-us/Annual-reports